If a decrease in income leads to a decrease in the demand for ice cream, then ice cream is
A) a complement. B) a necessity. C) a normal good. D) a neutral good.
C
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The perfectly competitive firm has no influence over price because
A. its output is so insignificant relative to the market as a whole. B. antitrust laws constrain perfectly competitive firms. C. consumers establish the prices of products. D. it doesn’t know its demand curve.
In 2002, the United States imposed restrictions on the importation of steel into the United States. The open-economy macroeconomic model shows that such a policy would
a. lower the real exchange rate and increase net exports. b. lower the real exchange rate and have no effect on net exports. c. raise the real exchange rate and decrease net exports. d. raise the real exchange rate and have no effect on net exports.
What does the upper half of the diagram represent—the part marked 1?
a. the product market b. the factor market c. the government flow of resources d. the flow of income
Which of the following is true at the output level where average total cost is at its minimum?
A) Marginal cost equals average total cost. B) Average variable cost equals fixed cost. C) Marginal cost equals average variable cost. D) Average total cost equals average fixed cost.